China’s Regulations Are Not As You Probably Think And They Never Have Been

Fuzamei (复杂美) most likely doesn’t ring a bell to most people in the West, yet it is one of the leading blockchain development companies in China since 2013, holding 39 blockchain patents and therefore being amongst the top 10 in the world. We first heard of them, after they won the award of the World Blockchain Conference in Wuzhen Annual BaaS (Back-end-Service) and the release of their Chain33. China Crypto News reached out to their CEO Mr. Wu Sijin, to get to know more about the Hangzhou based company, the city that is home to the $2bn backed blockchain park and a core area of China’s blockchain industry.

“I started out with quantitative trading and I always focused on the investment market. I remember that time when a friend put $450,000 into the Bank of Cyprus, which he borrowed to buy a house, but he was told he can only withdraw $110,000 at a time when he wanted to withdraw the money. This experience shocked me as well as inspired me. That’s the reason why I first time came across the concept of Bitcoin in 2013, I had a huge interest in the technology behind it. I believe the features of blockchain technology such as the tamper-proof and the value-delivering aspect will have a revolutionary impact on the economy how we know it today. These reasons combined is why I decided to devote myself to this industry,“ Mr. Wu Sijin recalls.

In 2015, we were also invited by the government to participate in an event about the demonstration of blockchain bill exchange. Together with Hainan Airlines „Sea Horizon“ and Midea Finance (After we worked with Hainan Airlines “Sea Horizon” and Midea Finance on some blockchain projects, we started developing the parallel public chain, Chain33, which has officially been launched recently and is open source.

Speaking about the present, Fuzamei nowadays employs about 200 people, of which nearly 80% are senior technicians from enterprises such as Oracle, Huawei, and Alibaba. Starting in 2013, they applied for their first patent in 2014, which is the retrieving function of a wallet. Going into 2015, they developed other very useful and relevant applications such as “multi-signature” and “POS mobile light wallet”.

When asking him about the blockchain and digital currency market in China, he said “Most people misunderstand the regulations around Bitcoin in China. They think that Bitcoin is illegal in China. But the truth is that the government only stipulates that Bitcoin cannot be used by third-party financial institutions. Earlier this year, Shenzhen Court clearly decided on Bitcoin. It is a legal property. Therefore, you can possess and transfer it. At present, as regulations and policies are imperfect and uncertain, it is the best time for us to dig deep into the technology, focus on research and development. In early 2018, the Hangzhou government wrote a paper about the development of blockchain where they encourage everybody to keep developing and researching blockchain. As long as it can help the development of society, the government will show support and continue to improve the regulations.”

Also interesting for you:

Recently, Fuzamei’s unique model of a parallel chain, the Chain33, is now open source. It combines the consortium chain and the public chain. The difference between those chains is their consensus mechanism. Speaking of the consortium chain, no data tampering or deleting is possible either. As we all know, deleting or tampering data on the blockchain is not really what it was designed for. However, in regards to the European GDPR (General Data Protection Regulation), deleting data could be interesting for some cases in a sense of complying with these guidelines. Unfortunately, Fuzamei told us that their pure focus on China results in not knowing a lot about the GDPR. The Chain33 aims to satisfy most enterprises’ demand for autonomous and controllable open source blockchain applications.

Their core business is providing solutions for supply chain, asset digitization, financing, product lifecycle tracking, etc. Due to their early market entry and their built up expertise, they have established partnerships with big companies like Xiaomi, Jingdong, Microsoft, and Huawei to develop and research these fields.

Together with Midea (美的), a Chinese electrical appliances manufacturer, listed on the Fortune 500 Global and the world’s largest producer of robots and appliances with more than 100,000 employees worldwide, Fuzamei jointly created Midea’s financial blockchain bill trading platform which is based on Fuzuamei’s invented blockchain based matching system.

How it works:

The matching system tracks the enterprise’s payables, the suppliers’ receivables, and other credits and debts and put it on the blockchain. It aims to reduce the dependence of SMEs on bank funds and aims to reduce financing costs.

Mr. Wu Sijin said: “If a fruit farm plans to produce 10,000 apples, we will put 10,000 apples in the form of a token on the blockchain. If consumers want to purchase apples, they have to deposit cash to gain the right to buy these apples later on. If you decide to not buy it in the end, you could also transfer the right to someone else. Due to the characteristics of the blockchain, the pre-sale can happen on any online platform, i.e. Taobao, or P2P. After the pre-sales is over, farmers can look into the numbers and plan how much they have to produce.

Mr. Wu Sijin believes that the declining digital currency market we see at the moment is not affecting the steady growth of the blockchain technology. The attitude of Chinese companies towards the technology is very positive as the blockchain can solve financing difficulties for SMEs. Throughout the development of the blockchain, the United States had the leading edge in innovation, but in terms of application scenarios, China has proven to be very fast.

“This huge market in China has given us a broad space for practice and ability to accumulate a lot of experience. In 2019, more international companies and developers are welcome to join the Chain33 platform.”

In conclusion, we see Fuzamei as a background player. They are not the typical coin or token project we have hundreds of in the market, rather, they offer solutions for established enterprises that want to upgrade their technology. Only focusing on the Chinese market and not doing anything overseas, they might not be in everybody’s interest. However, we might see an IPO in the future if the company continues to grow.

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